As we all approach retirement, we often dream of someday owning a piece of Paradise, somewhere in Florida, Arizona, Hawaii, or even Puerto Vallarta; someplace with a climate conducive to kicking back and enjoying life to its fullest, year round.

To more than 50,000 retirees, Puerto Vallarta, located on the Mexican Riviera along the Pacific Ocean at the same latitude as Hawaii but six hours closer and with a lower cost of living, has been selected as their primary or part time retirement destination. Unlike the arid zones of Arizona, magnificent ocean views are available everywhere in Vallarta. Unlike the flat land and low elevations throughout Florida, the Sierra Madres provide the back drop to all of the Vallarta area providing a beautiful array of tropical flora and fauna.

The city of Puerto Vallarta lies on the innermost part of the 25 mile diameter Banderas Bay. The total land perimeter of the bay is approximately 60 miles, however only about 40 miles of shoreline is available for foreign ownership. This available land extends from Mismaloya, 10 miles south of Vallarta, to 25 miles north of Vallarta near Punta Mita in the state of Nayarit. An additional stretch of Pacific Ocean shoreline extends about 15 miles north of Punta Mita with certain portions available for foreign ownership, thus providing the total Greater Puerto Vallarta area roughly 55 miles of beachfront property.

With Greater Vallarta

So, you?ve reached a point in your life where you think that you?ve learned a little about business, finance, contract negotiating, real estate, etc. and have at least a layman?s knowledge of law pertaining to each. Being that savvy, you might also be aware of the incredible retirement locations and values south of the border; furthermore, you might even be considering Mexico as your retirement destination. If so, you might as well forget everything you?ve learned and leave your law degree at home!

Mexico, as beautiful as it is, has a somewhat different way of doing business and a completely different set of laws. Additionally, all legal transactions, including real estate transactions, are done in Spanish. Therefore, for those of you that may be considering locations in Mexico as possible retirement destinations, the following information should give you some insight as to how the Mexican real estate industry works, list some of the possible pitfalls, and most importantly, give you the guidance required to assure a pleasant and safe experience.

In 1984, we made our first real estate purchase in Puerto Vallarta; a condominium in Mismaloya, about seven miles south of town. Our second purchase, two years later, was the adjacent condo. A year later, we removed the wall between the two condos and remodeled them into one very spacious three bedroom condo. For thirteen years, while still working in Houston, we thoroughly enjoyed visiting Vallarta two or three times a year.

At some time after the purchases of the two condos, we noticed that our original escrituras (legal property documentation similar to a title or deed that is held in a fidecomiso or bank trust) showed the property values to be about one third of what we actually paid for them. When we inquired about the discrepancy, we were told that the lower values were used in order to reduce our annual property taxes.

It wasn?t until many years later, when we decided to sell the condo, that we learned that capital gains taxes were due on the huge difference between the selling price and the documented purchase price. Ouch, we owed substantial taxes on a paper gain, when in fact; there was very little real gain! We then learned that the condo developer entered the extremely low sales prices on all the escrituras in the condo complex in order to evade paying substantial capital gains taxes. As we later learned, the developer could have entered the selling price, the appraised value, his cost of construction, or just about anything imaginable into the escritura, and we, being the na

Real estate laws of Mexico don’t make it mandatory for a real estate agent in Mexico to have a real estate license. This essentially means that anybody can sell property in Mexico. This makes it important for anyone looking to buy real estate in Mexico to be more careful and choose only the best and most knowledgeable Mexico realtor. This step can be the deciding factor in whether you get the best deal while purchasing your dream Mexico home or not.

A professional association called A.M.P.I. (The Mexican Association of Real Estate Professionals) is present which has been given recognition by National Association of Real Estate Professionals (NAR). This association strives to bring together Mexico Real Estate Agents under one umbrella to provide customers waith world class services through extensive training using latest technologies. Since any kind of real estate investment is a huge step for anybody, especially when it’s in a foreign country, it’s always advisable to select a Mexican realtor that is a member of this organization. This ensures that at least the real estate broker in questions is properly trained in all the intricacies of a property transaction. Also, since the real estate company is a member of AMPI, you can be sure that you are dealing with a company of repute which is fit to represent you in Puerto Vallarta real estate market or any other major regions like Playa del Carmen and Cancun.

Once you contact any real estate agent in Mexico, notice how and when s/he responds. A real estate broker who responds to you immediately and strives to build a relationship is a positive signal. Also, check how well the Mexico Realtor is familiar with the location and the town. A real estate agent should be well versed with the all the neighborhoods of the city. Also, ask the Mexican real estate agent if s/he has any previous experience with foreign real estate investors. This is important as there are many intricacies involved when a foreigner buys property in Mexico. Also, make sure that if you are speak in English then the realtor should also know English properly. Any miscommunication at any step of a transaction can be a disaster. So make sure you are comfortable with your agent.

Once you have narrowed down your search, provide your real estate agents with all the details. It’s better to be specific about your budget, property type, location and amenities you prefer. This will help the realtor in showcasing you the properties best suited to you. Though, working with one agent is preferable as it saves you hassle and lot of time (remember you are buying a property in Mexico !), you can talk to a small list of agents until you are sure that any one of them is capable of catering to your needs. Another advice is to select services of a buyer’s broker. A buyer’s broker works with buyers and helps them in selecting the property they want. Many of the agents are seller agents and have seller interests in mind while making a deal. A buyer’s agent will look for buyer’s best interests and will get best prices and terms for a buyer. This can save you lot of dollars while purchasing a property in Mexico.

If you keep these tips in mind while buying a Real Estate in Mexico, you can have a memorable experience even while buying your dream Mexico vacation home.

Author: Tom Budniak